Public Citizen supports mechanisms established under the Affordable Care Act (ACA) that will enable the movement toward state-level single-payer systems, which the law’s waiver process enables, even though we do not endorse the ACA as a whole. States that want to establish stronger programs than the federal system will be able to using the waiver process when it becomes available to states in 2017. By establishing state level single-payer systems, we hope to clear a path to eventually move toward Medicare-for- all at the federal level.

Although Public Citizen endorses moving altogether away from an employer-sponsored health insurance system and toward a single-payer system, the debate over current policies that are intended to increase Americans’ access to health care should at least be based on accurate information. The U.S. Chamber of Commerce has engaged in an aggressive messaging and lobbying campaign to delay and potentially repeal a mandate in the ACA for businesses to provide health insurance benefits to their employees.

This campaign is based on exaggerated claims and misinformation.

About 55 percent of Americans who have health insurance receive their benefits through an employer. Drafters of the ACA looked to take advantage of this widely utilized option to further expand health care coverage.Included in the law was a requirement that businesses with 50 employees or more offer affordable health insurance coverage to their employee or potentially face a penalty.

U.S. Chamber President and CEO Tom Donohue claims, “[T]he law actually jeopardizes existing jobs by changing the definition of full-time work from 40 hours to 30 hours, adding insult to injury for American workers. [This change gives] some employers little choice but to reduce employees’ hours to avoid the requirement to provide coverage.”

However, the Center for Budget and Policy Priorities found no significant shift to part-time employment in anticipation of the implementation of the employer mandate. While some employers have announced that they are cutting hours as a result of the ACA, they are the exception and not the rule. Large numbers of companies are not reducing hours to prepare for the employer mandate. In fact, recent trends have shown a decrease in the number of workers who are involuntarily restricted to only working part-time. Meanwhile, the number of employees working more than 30 hours per week rose in the first half of 2013.

The Center for Budget and Policy Priorities does predict a shift from full-time employment to part-time employment of 1 to 2 percent as a result of the ACA. Meanwhile, the Chamber advocates raising the full-time threshold to 40 hours per week from the ACA-mandated 30-hour week. This in itself would reduce the number of workers eligible for coverage. Raising the full-time threshold to 40 hours a week also would place significantly more workers at risk of having their hours reduced than the current 30-hour threshold. This is because 43 percent of the American workforce works 40 hours per week while just fewer than 8 percent of workers work between 30 and 34 hours per week.

The Chamber also argues that the employer mandate will force small businesses to hire fewer employees, but the mandate has little to no deterrent effect on the hiring of truly small businesses. Businesses with fewer than 50 employees are exempt from the mandate and are eligible for federal tax subsidies if they choose to provide insurance for their employees. Since 89.7 percent of all U.S. companies employ fewer than 20 people, few small businesses are close enough to the 50-employee threshold for the mandate to be a hiring consideration. Most small businesses are focused on getting costumers in the door, and would rather hire the people they need to best serve their customers.

The wisdom and potential effects of the employer mandate are still hotly debated by conservatives and liberals alike, but the Chamber’s campaign against implementation is based on hyperbole instead of solid data.

Although the U.S. Chamber of Commerce has said it will abandon its feverish efforts to repeal the Affordable Care Act (ACA), it appears to be fighting to block funding for the law rather than trying to kill the program outright. With an eye toward making the ACA unworkable, The Chamber is now focusing on repealing two key funding components: the medical device tax and the annual fee on health insurance companies.
Were the Chamber to succeed in removing funding, parts of the law would cease to function properly and would eventually fail altogether. Public Citizen does not endorse the ACA, but we do support the law being fully funded in order to move toward state-level single-payer systems, which the law’s waiver process enables. States that want to establish stronger programs can do so using this mechanism, and by establishing state level single-payer systems we hope to clear a path to eventually move toward Medicare-for-all at the federal level.

The Chamber in its lobbying efforts and messaging argues the ACA imposes substantial financial burdens on employers and individuals, and frequently labels the law a “job killer.” In making these claims, the Chamber consistently relies on exaggerated and overstated data which, when given a second look, undermine the integrity of its argument.

The medical device tax: A necessary revenue stream

The ACA is funded in part by a 2.3 percent excise tax on manufacturers and importers of medical devices. The medical device industry and the Chamber argued that the tax would increase costs, “suppress innovation” and “kill jobs,” but this could not be further from the truth.

Not only can the medical device industry afford the tax – with estimated total sales of over $100 billion – but the industry has been accused of relying on anti-competitive practices that result in almost no price competition in the market. The lack of transparency in pricing and the industry’s coziness with physicians stifles innovation, since manufacturers have little incentive to create or improve devices that increase quality of care. This tax, coupled with the ACA’s focus on cutting costs, may provide incentives for manufacturers to find ways to deliver more cost-effective care.

The U.S. Chamber pointed to a recent survey to support its opposition to the tax. The survey, conducted by the Advanced Medical Technology Association, the trade group representing medical device manufacturers, claims that the tax has forced medical device manufacturers to eliminate jobs, reduce innovation and move jobs overseas. The Center on Budget and Policy Priorities has already questioned the credibility of the survey because it is not representative of the entire industry, misrepresents how the tax works and fails to take into account offsetting changes in federal fiscal policy.

There is no evidence that the tax will increase costs for consumers, since the industry stands to gain business under the ACA (which relies in part on the tax), and because medical device spending represents less than 1 percent of total health care spending. With greater business and innovation in the industry, it is unlikely that this tax will “kill jobs.” The U.S. Chamber, in relying on inaccurate and exaggerated information, has made wild claims with no basis in reality.

An annual fee on insurance companies rather than taxpayers

The annual fee on health insurance companies was imposed to help pay for health care reform by expanding coverage for all Americans and slowing the growth of costs without adding to the budget deficit. Repealing the tax would cost taxpayers $166 billion over the next nine years to make up for the lost revenue due to pay-as-you-go rules, and might encourage the repeal of other revenue measures. This would leave Congress with two choices: reduce ACA and other spending, or increase the budget deficit, both of which are non-starters in the current Congress.

The U.S. Chamber argues that the tax will significantly raise premiums for small business and individual consumers; however, this is only part of the story. While premiums are expected to be 2 to 2.5 percent higher than they would without the tax, the ACA as a whole works to slow the growth of premiums. The Congressional Budget Office actually estimates the premiums will be lower for most employers, and the Center on Budget and Policy Priorities predicts a greater positive effect from the tax on health care in the country.

The U.S. Chamber of Commerce is trying to surgically remove the heart of the ACA – its revenue flow – with claims based on misinformation, in an effort to stop the body from functioning. The Chamber claims to have given up the fight against the ACA as a whole, but its actions say otherwise. Were the Chamber to succeed in repealing these two components of the ACA, we would be thwarted in the push to establish state-based single-payer systems, which already are building momentum in states such as Vermont and California. Our healthcare system deserves better.